• 2016 GDP: $304 Billion• Poverty: 25%• Population: 105 Million• 66% of the population is aged 23 or younger.• Literacy Rate: 97.5% or 71.5 million of the population.• English-speaking• Religion: Catholic (86%), Muslim (11.6% )• 7,107 islands, Metro Manila as the capital

• 2016 GDP growth: 6.8%• Inflation rate: 1.8%, government target: 2-2.4%• Economy set to expand more than 6.7-7% this year, ranking

among the fastest-growing in the world.• Robust growth over the past six years with an average of 6.3%

from 2010-2016 exceeding regional actors including China, Indonesia, Malaysia, Thailand, and Vietnam.

• Major Industries: Manufacturing (Semiconductor), Information Technology and Business Process Outsourcing, Tourism, Agribusiness.

• Economy driven by: Remittances - 12 million overseas Filipinos contribute roughly

10% of the GDP) Service Sector (BPOs) -1.5 million workers Consumption

• Long Term Allies• Largely positive towards the United States• Stable and Democratic• President Duterte was elected in May 2016• New Administration has strong economic leaders and a ten point

socioeconomic agenda in place.

• $8.3 billion U.S. exports to the Philippines in 2016.• $10 billion U.S. imports from the Philippines in

2016.• United States is the Philippines’ third largest trading

partner behind China and Japan.• Philippines was the 31st largest market for U.S.

exports in 2016.

• The U.S. is among the top foreign investors in the Philippines, with $4.7 billion in existing FDI stock.

Ranked 57 out of 140 economies

WEF Global Competitiveness Report(2016)

IFC Ease of Doing Business Report (2016)

TI Corruption Perceptions Index (2016)

Ranked 101 out of 176 economies

Ranked 99 out of 190 economies

Up by 28 in 6 years Up by 49 in 6 years Up by 33 in 6 years

Ranked 52 in 2015 Ranked 95 in 2015 Ranked 95 in 2015

Ranked 85 in 2011 Ranked 134 in 2011Ranked 148 in 2011

• Bureaucracy• Lack of transparency• Lack of expertise• Legacy of corruption• Strain on infrastructure/cost of energy• Local Government Units – rules and requirements• Judicial system: appeals process, “legacy cases”• Limited foreign ownership: 60/40 rule currently under review• Government Procurement Reform Act

• Philippine government plans to spend $160 billion for infrastructure projects in the next 5 years.

• There is a Build, Build, Build mantra• Funding through Government budget, PPP, Overseas Development

Assistance funds, or hybrid• China, Japan, Korea very interested in Philippine infrastructure projects• Open to unsolicited proposals (currently reviewing airport and toll road

unsolicited proposals)• PPP projects: airports (expansion and O&M), rail, water projects

Infrastructure

• Several Proposals in play to liberalize foreign investment (60/40 rule)

– PPP center working on a framework to allow for 100% Operations and Maintenance (O & M) of utilities

– Amendment of the Utilities Act to remove transportation and ICT from the definition of a utility

– Change in the constitution to allow for greater foreign investment.

Infrastructure

• Best Prospects:– Transport: transport design and engineering companies, navigational aids,

airport ground support equipment, security equipment, locomotives, signaling equipment.

– Water Resources Products and Equipment: Products/equipment for the construction and development of additional water resources and water supply and distribution systems; Products/equipment/accessories for sewage/septic projects; packaged or modular wastewater treatment equipment; wastewater treatment technologies that will result in smaller footprints (due to land constraints).

Infrastructure

• World leader in renewable energy with a third of its total electric power needs met through renewable sources.

• The dependable energy capacity of the country is 17,500 megawatts.

• Renewable energy fiscal and non-fiscal incentives to equipment manufacturers/suppliers with the goal of achieving 60% renewable energy generation by 2030.

• Energy Sector Commercial Opportunities:- Fully Privatized Power Sector with 10 major producers.New facilities, Plant expansion, rehabilitation, and upgrading,maintenance services

Energy

Renewable35%-

Geothermal -10%

Hydro – 20%Solar/Wind: 5%

Coal30%

Diesel20%

Natural gas15%

Philippine Energy Mix

• Energy Sector Commercial Opportunities:– Supply of equipment and services to greenfield generation projects, additional renewable

energy deployment.– Top distribution utilities (Meralco, Aboitiz, Cepalco) to implement smart grid deployment.– Rural electrification systems operations improvement, Off-grid/microgrid and hybrid

solutions (solar/biomass plus battery energy storage (BES)– LNG imports will increase in the next 5 years. Natural gas from Malampaya Gas Plant

tapers off in 2023.– Coal remains the fuel for baseload power; coal power plants use subcritical and super-

critical technologies (boilers are for polarized coal in the tropics).

Energy

• 2016 IT spending estimated at US$4.4 billion, 10% annual growth expected.

• ICT industry growth expected to continue due to opportunities in the financial, telecom, and Business Process Outsourcing (BPO), and health IT sectors.

• New Department of Information and Communication Technology (DICT) created in May 2016.

ICT

• Telecom duopoly: PLDT and Globe • 116.8 million mobile subscribers in 2015, about 40% of which use

smartphones • Filipinos are prolific users of social media: 48 million active social

media users • Tremendous growth potential for broadband• Upward trend for smartphones as it becomes more affordable• Challenge: slowest internet speed in Asia Pacific at 4.5 Mbps, 108th in

global rankings (Akamai’s Q4 2016 State of the Internet Report)

ICT

• Opportunities: The DICT has been instructed by the President to:– Make faster Internet speeds a national priority– Cut red tape for cell tower building– Deploy free nationwide broadband and Wi-Fi

• Best prospects: IT security, servers, networking equipment, data storage and management, software-as-a-service, smartphones and tablet, fiber optic, middle mile and last mile connectivity for underserved and unserved areas

ICT

• Increased demand for electronic surveillance for crime prevention and apprehension purposes both in the national and local government levels.

• There is a surge of procurement for personnel protective equipment (PPE) for both the military and law enforcement agencies.

• The Manila International Airport Authority (MIAA) is planning an Integrated Security Management System (ISMS) with the following components:

– Command and Control Center System– Screening and Surveillance System– Permit and Access Control System– Perimeter Intrusion System– Emergency Response System– Security Zone Development

Safety and Security

• 2017 Philippines Defense Budget: US$2.7 billion• 2015 U.S. defense assistance to the Philippines: US$86.2 million• 2016 U.S. defense assistance to the Philippines: US$131.5 million• Republic Act (RA) 10349 or The Revised Armed Forces of the Philippines

(AFP) Modernization Program – a 15-year program divided into three phases/horizons.

• The AFP modernization continues under President Rodrigo Duterte, now moving to its second horizon from 2018-2022.

• Current administration’s priority is more focused on internal security/counterterrorism operations, and maritime domain awareness.

Defense

• The Philippine medical industry is almost completely dependent on imports. • U.S. market share is an average 20%.• The U.S. products are strong in high-value, low-volume capital equipment.• Opportunities exist in public and private sector for linear accelerators, electro-

cardiographs, ultrasonic scanning machines (ultrasound), magnetic resonance imaging (MRI) equipment, x-ray and radiation equipment, breathing appliances, and computed tomography apparatus (CT scan), as well as diagnostic and laboratory devices, and biologicals.

• Private sector investment in healthcare has provided much-needed capital for facilities to upgrade and modernize equipment.

Healthcare

• U.S. Franchises dominate the Philippine market.– The market has a large, young consumer base– English language is widely used – The market has a cultural affinity with American values– Filipino consumers love products that are made in the U.S.A

• New market entrants innovate and adapt quickly to the environment in order to succeed. Franchise managers closely observe foreign franchises, adapt best practices, and train with experienced establishments.

• Franchises must be flexible in terms of portion size and cost.

Franchising

• The Philippines adopted the K-12 education system in 2015.• Philippine private and public educational institutions are in need of international partnerships with

the transition to the K-12 system. • There were 2,886 Filipinos student enrolled in United States in 2015/16. • Best Prospects: bilateral exchange education programs; consortia exchange relationships,

institutional linkages, government scholarships offered to K-12 professors/teachers

Education

Travel and Tourism

• UNWTO has identified Filipinos as one of the fastest growing travel spenders among emerging markets. Economic growth in the Philippines is creating an ever larger Filipino middle class that has disposable cash to spend for travel.

• U.S. National Travel and Tourism reports ranked 34th market visiting the U.S. in the with nearly 240,000 visitors. Philippines topped the ASEAN region in sending tourists to the U.S.

• Best Prospects: travel packages, hotel accommodations, air tickets, marketing of attractions and destinations.

• Local presence required

• Do your due diligence – Know Your Partner!

• Patience and determination is a necessity

• It takes time to develop the market

We will be leading delegation of Philippine buyers to the followingU.S. Department of Commerce International Buyer Programs:

• NAB Show, Las Vegas, NV April 24-27• Offshore Technology Conference, Houston, TX May 1-4• The NRA Show, Chicago, IL May 20-23• InfoComm, Orlando, FL June 14-16• International Franchise Expo, New York, NY June 15-17• Outdoor Retailer Summer Market, Salt Lake City, UT July 26-29• 69th AACC Annual Scientific Meeting and Clinical Lab Expo, San Diego, CA July 30 – August 3• Solar Power International, Las Vegas, NV September 10-13• ASIS, Dallas, TX September 16-19• WEFTEC, Chicago, IL September 30 – October 4• Greater New York Dental Meeting, New York, NY November 24-29• POWER-GEN International, Las Vegas, NV December 5-7

Visit the U.S. Commercial Service website to learn more about the list of 2017 IBP Shows: www.export.gov/ibp/

Services for U.S. Companies:

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